Data Regulation: Who Should Control Our Data?
32 Pages Posted: 28 Mar 2021
Date Written: March 10, 2021
We consider a platform that collects data from users. Data has commercial benefit to the platform, personal benefit to the user, and public benefit to other users. We ask whether the platform, or users, should have the right to decide which data the platform commercializes. We find that when users differ in their disutility from the commercialization of their data and the public benefit of data is high (low), it is welfare enhancing to let the platform (users) control the data. In contrast, when heterogeneity is in the disutility from the commercialization of different data items, it is welfare enhancing to let users (the platform) control the data when the public benefit of data is high (low).
Keywords: data regulation, network extremities, coordination
JEL Classification: L1
Suggested Citation: Suggested Citation